On long-tail counterfeits and zero-trust ecommerce

When I moved to China in 2012 I was obsessed with Taobao. Contrary to the Western prejudgement that China was bereft of consumer variety, it was clear by that point that two forces conspired together to offer a superabundance of goods:

  1. Virtually all consumer products were manufactured in China, and more importantly,
  2. Every boardroom around the world had, or was beginning to have, a quarter single mindedly committed to ‘owning the China market’

Taobao, as China’s leading eCommerce marketplace, thereby became the concentration of all these initiatives.

Compounding all of this variety with a whole other question of provenance and authenticity was the fact that China was the leading global exporter of counterfeit goods. At the Nanjing-West fake market in Shanghai, vendors shilling fake watches would, when prompted, lead you into a small anteroom with more expensive and compelling counterfeits, and, prompted again, might then even open the door to the ante-ante-room.

In this context I became fascinated with headphones.

~2013 was about the time that Beats headphones took over the premium international market. Alongside this rise was a wave of counterfeit headphones.

Unlike a watch, the inner workings of headphones aren’t readily grokkable. With the right access to plastic moulding, an enterprising counterfeiter can make a compelling surface, and thereby a compelling counterfeit. Visually identifying a driver is far beyond almost anyone’s comprehension, and so, this is the perfect object to counterfeit.

I dove into Taobao, looking for some novel means of certifying the authenticity of a headphone.

One common strategy for identifying non-counterfeit products on an ecommerce marketplace is to dive into the ‘long tail.’

Counterfeit operations require a decent outlay of capital — 10s of thousands of dollars for new moulds. The smaller the niche of a product, the riskier a counterfeiter’s wager. In this context, I sought out some niche headphones.

Initially I set my heart on a pair of Sennheiser PX-200 on-ear foldable headphones. With a US street price of ~$100, they were available on Taobao for as little as $15.

Was this a case of overabundant supply driving a market-price down, or enterprising counterfeiters exploring the longtail?

Unconvinced, I looked for permutations of the product I could trust in this highly suspect environment.

Eventually I found it: according to the product description, Asiana Airlines, an international Korean carrier, had commissioned some hundreds of the PX-200s for its first class passengers. Some excess of the product had made their way onto Taobao for a massive discount, available for ~$30. The headband of the headset was inscribed ‘Asiana Airlines.’

The pieces of this story formed a compelling picture. A niche headphone, with an even more niche product story, had effectively fallen off the back of the truck.

So naturally I bought them!

With headphones, the proof is in the experience, but even then there’s a huge margin of placebo effect and diminishing returns. Statistically, folks can’t distinguish between an uncompressed audio file and semi-passable MP3.

Even if these were counterfeit headphones, would I even be able to tell?

They arrived, they existed, and try as I might, I don’t think I can convery how absolutely dog-shit-bad they sounded out of the box.

I’d been had, and I’d been had thoroughly. I’d been tricked it a way that only Philip K Dick or Jean Baudrillard could love. A longtail instance of a longtail product, still subject to the same paranoid forces of counterfeiting and simulation. Hats off to the counterfeiter.